I’m finally consumer DEBT FREE & can now save 50% of my income but still feel poor!

I became consumer debt free last Friday due to it being a three paycheque month (I get paid bi-weekly). While I am absolutely ecstatic, I still feel poor. I still feel like I am in debt and need to be in austerity mode. I think it is due to being in debt for about 10 years. This is something I know I need to work on.

Now that I am consumer debt free (still have my pesky mortgage so not completely debt free), I can allocate half of my paycheque to savings which is about $2,100 per month. One thing I’m struggling with is how much to save for retirement and savings (house down payment, TFSA, etc.). I don’t get a company pension anymore or RRSP matching so this is all up to me. I read articles saying you should save 10% of gross income and other articles that say 10% of net income. Can you see why I was confused as to what to do?

I was planning on saving $1000/month for RRSPs to aim for early retirement at 55 but then I realized I am now part of a team. I will soon have a husband to help out with retirement savings and I also have CPP and OAS benefits to rely on in retirement. So I’ve decided to halve that amount to $500/month for now and see what happens. Part of me worries if I don’t put $1000/month away for retirement that I’ll end up spending the money.  I’ve been obsessively plugging in numbers for different scenarios on the Canadian Retirement Income Calculator and $500/month seems like a good place to start for now given that I have under $100K in my RRSP/LIRA already.

What am I going to do with the rest of my money? I’ve decided to start paying back my family. While I am consumer debt free, I am not technically debt free. I still owe them for lending me money to make stupid decisions with The Ex. My plan was to give them the proceeds from the sale of my condo but I won’t be selling for 3-4 years. In the meantime, I’ll be paying them $500/month. I’ll be saving the remaining $1100/month in a high interest savings account such as EQ Bank. I can always give my family or RRSP a lump sum payment whenever I feel comfortable.

These saving streams are just new “payments” to me and that’s why I still feel poor. Don’t get me wrong. I am extremely happy to be in this situation now. I have never had an opportunity to save this much money before and it’s all new to me. I am so excited to learn so much more and am looking forward to what the future holds!

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